A growth spurt for the UK economy

There is a good feeling around, tinged with a little sadness and a slight hangover. The Olympics Games have left town. The venues, the infrastructure, the people and athletes all performed brilliantly and the cynics and critics have fallen silent or changed their tune. This won’t all hold, although I sense a great Paralympics Games could help capture this special moment and reinforce our combined sense of pride, humanity and belief in ourselves and our institutions. We can do it on time, on budget and with a sense of flair.

The plain fact is we need more homes. This requires more action, more innovation, more risk and, dare I say, more money

The Games will bring (and have already brought) economic benefits. But they won’t turn the economy on their own. We face some tough challenges. Austerity is still in its early days and the economy is not in the “steady but improving state” expected two years ago.

So our focus must return to growth, but with a difference. Despite the challenges and the best intentions of industry and politicians we need to face the future with an inner belief and self-confidence tempered by an unusual mix of speed and humility. Most of all, and as we have discovered in the Olympics, we need to do it together. I know that some might consider this rather naive or a bit too misty eyed. However, the more I think about the what we have been through since the run on Northern Rock in September 2007 and what we potentially face, the more I am convinced that the country wants and needs its political leaders and the construction industry to bury their differences and work for a consensus in a number of key economic areas.

As a starter for 10, my first nominations for this new crisis management approach are:

• Housebuilding - there are moves afoot to do more, assuming that the speculation in the FT is right. The plain fact is we need more homes. This requires more action, more innovation, more risk and, dare I say, more money to boost housing supply and construction jobs now, and to sustain this into the medium term. The challenges are immense and don’t just rest in the housing sector. The industry needs the confidence that action now won’t leave it exposed in the future. This demands a different approach. Housebuilders must be ready to build many more homes, some land values may still need to be brought in line with market rates and the willingness of local authorities to negotiate section 106 agreements must not be seen as a chance to end the provision of affordable housing on new private sector developments. Local authorities in return need to be more pro-active in unlocking the supply of homes and in recognising the genuine difficulties in making it financially viable to build homes - this means being flexible on section 106 and ensuring a five-year supply of land viable for development is identified and available.
• Green Deal - early action on a big scale can bring economic and energy efficiency benefits. This points to an important role for social landlords as neighbourhood delivery partners and landlords of substantial portfolios of existing homes. There are hints that the government could be moving this way but political collaboration and clarity could create the impetus that so many people are seeking. More importantly, we need a solution and an implementation plan that we can unite behind with a sense of urgency, and a confidence that the construction and energy industries will deliver.
• National economic spatial plan - sector priorities for industrial and economic growth need to be identified on a spatial basis with targeted support channelled through Local Enterprise Partnerships (LEPs). Despite the variable impact and effectiveness of LEPs to date they embody two important concepts that demand more recognition and support, namely: a) collaboration by local authorities across administrative boundaries in the interest of achieving combined economic success (for cities this has largely meant the recognition of their city regions without the use of this term), and b) the importance of collaboration between local authorities and private enterprise so that economic growth strategies can succeed.

None of this is easy. It is important that different political views and approaches are heard and debated. But sometimes the issue transcends politics. Just like the prime minister was not allowed to touch the Olympic Torch so we must ask our politicians to focus on our collective spirit and match this with their own. Industry, meanwhile, must be more specific in what it demands and more compelling in what it offers.

Track suits on!

Richard McCarthy is an executive director of Capita Symonds and former director general of neighbourhoods at the communities department